Property prices in the city of New York are some of the highest in the world. This means that property owners in the city can get huge sums of money if they chose to procure a hard money loan. This is an asset-based type of financing that is designed for borrowers who own residential or commercial properties. When looking for hard money lenders New York City residents should know that there are many reputable lenders in the market.
This method of financing is the quickest way of getting a huge amount of loan provided there is a valuable property. An individual will have to approach a lending firm and try to negotiate for a certain amount of money which would be repaid at a specified number or months or years. Such loans are normally available for short to average period of time depending on the amount. Hard money financing has numerous benefits compared to conventional loans.
These loans are normally offered to property owners who are experiencing some financial difficulty. For instance, a person who has defaulted on an existing mortgage can procure this loan to make up for the default or offset the mortgage altogether to avoid foreclosure proceedings. Consumers who are facing bankruptcy proceedings can also apply for this type of loan to pay off their debts.
Majority of people confuse bridge financing as similar hard money lending but they are not well informed. In fact, they are very much different in that bridge financing is normally used by property owners who don't have any existing financial constraints. A similarity however exists in that both financing plans have very high interest rates.
Usually, potential borrowers would have their property valued after which they can get figures between 0.65 and 0.75 of the current market value. It is a low percentage loan to value ratio but considering a borrowers state and lending risks involved, options become narrow. Borrowers however lose in this deal but there are higher chances that they will repay the loan.
One of the most notable features of this credit facility is that it comes with a very high interest rate. This is largely due to the fact that the lender is risking a lot by lending to a person who has a poor credit history. Since the loan is also availed within a very short period of time, investors or lending companies must compensate themselves well for the service.
The hard money loan industry is largely unregulated, so borrowers do not have the usual safeguards. It is therefore important for both parties to be careful when making a deal. Ideally, borrowers should do their research before choosing a lender. The internet can be extremely helpful in giving consumers information about lenders in the industry.
Borrowers are advised, when borrowing money, to comprehensively read the terms and conditions as stipulated by the lender. Understanding the terms and conditions of any money lending institution is very crucial in making firm decisions that will not hurt a borrower later. Because this financing service involves huge amount of money, it is recommended that borrowers consult a professional lawyer to provide guidance through the whole process.
When you are looking for information about hard money lenders New York City locals should pay a visit to our website here today. You can see details at http://www.commercialmortgageyes.com now.
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